Natural gas price hits 7-year low

Thursday, August 20, 2009 CBC NEWS:

Natural gas prices on the New York Mercantile Exchange dipped below the $3 US level on Thursday for the first time in seven years.The September natural gas contract was trading at $2.94 US per thousand cubic feet in afternoon NYMEX trading — down 18 cents from Wednesday's close. The front-month gas contract hasn't been that low since August 2002.Consumers could see lower heating bills this winter as natural gas prices drop. (CBC)The drop followed the release of U.S. supply data that showed yet another increase in gas storage levels. The Energy Information Administration reported Thursday that the amount of gas stored underground in the U.S. grew by 52 billion cubic feet last week to 3.2 trillion cubic feet. That's 19 per cent higher than the five-year average of gas storage levels.

In Calgary, the AECO-C one-month spot price tumbled 17.5 cents to $2.36, according to data from the NGX. Natural gas prices have plunged by 80 per cent in the last year as buoyant supplies and sluggish demand combined to create the most bearish market for gas in years.The oversupply has reached the point that analysts say many of the available gas storage facilities in North America are now almost full. In an average year, the facilities don't approach capacity until early fall.

In the 2008-09 fiscal year, Alberta took in $5.8 billion from gas royalties, more than triple what it got from oil royalties. Every 10-cent drop in gas prices costs the provincial treasury $126 million in lost revenue.

----------------

Don Quixote Note: The City of Vernon receives 3.09% of the cost of natural gas consumed and delivered to City of Vernon customers who use Terasen Gas. City's revenue below. This fee is paid by all customers even those who signed a fixed natural gas contract with another supplier.

Vernon's share of 3.09% BC GAS FRANCHISE FEE
2000 $290,331
2001 $398,823
2002 $501,972
2003 $472,388
2004 $487,013
2005 $492,625
2006 $550,000
2007 $570,000
2008 $579,000

2009 $581,400 (est.)

Details at A HIDDEN TAX in your GAS BILL

--------------

In the Annual Report of City of Vernon 2008 on page 58 2008 - 4.6MB is the notation that the City of Vernon paid $318,084.57 in 2008 ($408,159.18 in 2007) to Terasen Gas Inc.. Details state that "beginning in Sep 2008, commodity component of natural gas purchased from another supplier through a fixed price contract. " (No term or rate given !!)

No idea if NORD (GVSC) has a fixed price contract for their gas bills. (Multiplex, Community Theatre etc. ???)